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UNION BANK INTRODUCES OFFSHORE CHINESE RENMINBI SOLUTIONS FOR U.S. TRADE-RELATED BUSINESS WITH MAINLAND CHINA
For Immediate ReleaseContacts:
With more than 20 percent appreciation in the renminbi since 2005, Union Bank now offers hedging strategies, including forward and option contracts, to manage foreign currency exposures for U.S. companies.
LOS ANGELES, October 12, 2011 – Union Bank, N.A., today announced the introduction of offshore Chinese renminbi (RMB) capabilities to assist U.S. companies in managing foreign currency risk associated with trade-related transactions they conduct with businesses in mainland China. Union Bank offers clients the ability to make or receive international payments in renminbi and also provides hedging solutions such as forwards and options which allow clients to manage anticipated foreign currency exposures. Union Bank is among the first banks in the U.S. to launch RMB trading through the Chinese offshore market.
"U.S. companies can now go through the recently created Chinese offshore market (CNH) in Hong Kong to conduct trade-related currency transactions with approved companies in mainland China," said Bradley Shairson, executive vice president and head of Global Capital Markets. "The new CNH market for the first time offers U.S. companies an opportunity to manage renminbi currency risk. Having access to hedging solutions such as forwards or options enables our clients to fix the value of future payables or receivables up front guaranteeing a predictable, fixed exchange rate. Clients can customize the hedges to match their underlying exposures providing protection against future exchange rate fluctuations ultimately enabling them to more accurately forecast financials."
In addition to hedging strategies, clients now have access to payment solutions as well. By paying mainland China suppliers in renminbi instead of U.S. dollars, U.S. companies can reduce or eliminate the impact of currency swings and create future certainty around international payables. U.S. companies transacting in renminbi may also receive preferential pricing from their suppliers creating certainty that their suppliers in China will receive sufficient payment in their operating currency regardless of exchange rate fluctuations. Companies can also create certainty with their receivables, thereby protecting their revenues.
Renminbi can be traded at the CNH spot rate for immediate delivery of funds or the CNH forward rate for a future-dated delivery of funds. Transactions must be trade-related, and prior to conducting transactions in renminbi businesses should confirm with their beneficiaries that they can receive renminbi from Union Bank. The mainland Chinese beneficiary must reside in one of the 20 authorized provinces and be one of the current 70,000 Mainland Designated Enterprises (MDE) that have approval from the People's Bank of China (PBoC) to transact in renminbi.
Union Bank is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU). BTMU was the first international bank in China when it opened its office in Beijing in 1980. It currently has 14 offices in mainland China.
Those interested in learning more about Union Bank's offshore Chinese renminbi (RMB) capabilities may call (213) 236-6943 to speak with Union Bank's Foreign Exchange advisors.
About UnionBanCal Corporation & Union Bank, N.A.
Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $80.1 billion at June 30, 2011. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operated 403 full-service branches in California, Washington, Oregon, and Texas, as well as two international offices, on June 30, 2011. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world's largest financial organizations. Visit www.unionbank.com for more information.